EXHIBIT 10.2
FIRST AMENDMENT TO SECOND AMENDED AND
RESTATED
EMPLOYMENT AGREEMENT
FIRST AMENDMENT TO SECOND AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (this “Amendment”), dated
as of January 28, 2011, between PHILLIPS-VAN HEUSEN CORPORATION, a
Delaware corporation (“PVH” and, together with its
affiliates and subsidiaries, the “Company”), and
MICHAEL SHAFFER (the “Executive”).
W I T N E S S E T H
WHEREAS, the Company has previously
entered into that Second Amended and Restated Employment Agreement
with the Executive, dated as of December 23, 2008 (the
“Employment Agreement”);
WHEREAS, in light of emerging best
practices with respect to executive compensation, the Company has
determined that it will not provide a Gross-Up Payment (as defined
in the Employment Agreement) to the Executive should the Executive
become subject to the excise tax (the “Excise Tax”)
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended;
WHEREAS, to mitigate the potential
adverse effect of having to pay the Excise Tax, the Company has
determined to amend the Employment Agreement to provide that if the
severance to be received by the Executive would subject the
Executive to the Excise Tax, the Executive’s severance would
be reduced by the amount required to avoid the Excise Tax if such a
reduction would give the Executive a better after-tax result than
if the Executive had received the full severance amount;
and
WHEREAS, the parties desire to amend the
Employment Agreement to effect the foregoing and make certain
clerical changes to conform certain language to language used in
the employment agreements of the Company’s other executive
officers;
NOW, THEREFORE, for good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1.
Definitions . Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed thereto
in the Employment Agreement.
2.
Amendment of Sections 3(b)(i) and
3(f)(ii) . In order to
clarify the amounts payable under Sections 3(b) and 3(f) of the
Employment Agreement, Sections 3(b)(i) and 3(f)(ii) of the
Employment Agreement are hereby deleted in their entirety and the
following is substituted in lieu thereof.
(a)
Substitution for Section
3(b)(i) .
(i)
If the Company terminates the
Executive’s services without Cause or the Executive
terminates his employment with the Company for Good Reason, other
than during the two-year period following a Change in Control (as
defined in Section 3(f)(i)(A)), the Executive shall be entitled to
receive from the Company (W) the portion of the Base Salary for
periods prior to the effective date of termination accrued but
unpaid (if any); (X) all unreimbursed expenses (if any), subject to
Section 2(d); (Y) an aggregate amount (the “Severance
Amount”) equal to one and a half (1.5) times the sum of (1)
the Base Salary plus (2) an amount equal to the bonus that would be
payable if “target” level performance were achieved
under the Company’s annual bonus plan (if any) in respect of
the fiscal year during which the termination occurs (or the prior
fiscal year if bonus levels have not yet been established for the
year of termination); and (Z) the payment or provision of any Other
Benefits. The Severance Amount shall be paid in 36
substantially equal payments and on the same schedule that Base
Salary was paid immediately prior to the Executive’s date of
termination, commencing on the first such scheduled payroll date
that occurs on or following the date that is 30 days after the
Executive’s termination of employment, subject to the
Executive’s compliance with the requirement to deliver the
release contemplated pursuant to Section 4(a). Each such
installment payment shall be treated as a separate payment as
defined under Treasury Regulation §1.409A-2(b)(2). If
the Executive is a “specified employee” (as determined
under the Company’s policy for identifying specified
employees) on the date of his “separation from service”
(within the meaning of Section 409A) and if any portion of the
Severance Amount would be considered “deferred
compensation” under Section 409A, all payments of the
Severance Amount (other than payments that satisfy the short-term
deferral rule, as defined in Treasury Regulation
§1.409A-1(b)(4), or that are treated as separation pay under
Treasury Regulation §1.409A-1(b)(9)(iii) or
§1.409A-1(b)(9)(v)) shall not be paid or commence to be paid
on any date prior to the first business day after the date that is
six months following the Executive's separation from service.
The first payment that can be made shall include the
cumulative amount of any amounts that could not be paid during such
six-month period. In addition, interest will accrue at the
10-year T-bill rate (as in effect as of the first business day of
the calendar year in which the separation from service occurs) on
all payments not paid to the Executive prior to the first business
day after the sixth month anniversary of his separation from
service that otherwise would have been paid during such six-month
period had this delay provision not applied to the Executive and
shall be paid with the first payment after such six-month period.
Notwithstanding the foregoing, payments delayed pursuant to
this six-month delay requirement shall commence earlier in the
event of the Executive’s death prior to the end of the
six-month period. For purposes hereof, the Executive shall
have a “separation from service” upon his death or
other termination of employment for any reason.
(b)
Substitution for Section
3(f)(ii) .
(i)
If within two years after the occurrence
of a Change in Control, the Executive terminates his employment
with the Company for Good Reason or the Company terminates the
Executive’s employment for any reason other than death,
Disability or Cause, the Company (or the then former Company
subsidiary employing the Executive), or the consolidated, surviving
or transferee person in the event of a Change in Control pursuant
to a consolidation, merger or sale of assets, the Executive shall
be entitled to receive from the Company (A) the portion of the Base
Salary for periods prior to the effective date of termination
accrued but unpa
